You are viewing a single comment's thread from:
RE: 📉 Steemonomics 💡 TIL: Why are we suddenly getting liquid STEEM rewards?!
The "printing" of SBD on the chain happens under the assumption that its value is exactly 1 USD of STEEM. To determine the final amount to be issued, the price-feed for STEEM/USD (a moving 7 day average) that is being broadcasted by the witnesses is being used. That's why we have been printing way too much SBD for quite a while and why it's "debt" isn't being settled.
...Ice cream?
Yes, please! I never say no to ice cream.
I guess you were trying to say that part isn't really clear?! I agree! Maybe an exemplary calculation can improve on that:
Let's say you get an upvote from an account that has 15,000 SP. That vote would be worth roughly 1SP in rewards. Now, if you have set the rewards to be paid out in liquid and vested rewards (50/50 SBD/SP), you'll get 0.5 SP powered up to your account and the other 0.5 SP will be converted and paid as SBD.
It's this conversion where the STEEM/USD value comes into play.
If STEEM's 7-day-moving-average price is 2USD at the time of conversion, you'll get 1SBD paid out (and the post rewards will show $2.00). If the price was, say 10USD, you would get 5 SBD from the 0.5 SP.
I hope that made more sense?!
Can I have my ice cream now?
Man, it DOES make sense now! I can't believe it, you just made me understand something math related.
Thank you very much for taking the time to explain. So, is this some kind of emergency procedure? Are we just that bad?
Oh! I almost forgot:
mhhmmm... that heap of deliciousness was worth it. I'm glad I could clear it up for you!
And yes, this is in fact a protective mechanism in the steem design to prevent the debt rate from exceeding. As all these rules, it was designed under the idea of $1-SBDs, hence it does not have the intended effect.
Witnesses did see this coming and potential remedies had been discussed... the sudden drop in STEEM-USD prices accelerated the situation, though, so nothing had been done in time.
But don't take this as FUD, it's not like the world is going to end, there are plenty of good arguments why the markets should be able to self-regulate the situation, but in the long term these rules definitely need to be improved!
Honestly, sometimes I think the whole steemit upvotes/flags mechanism has to be rethinked from the scratch.
But let's just wait and see. :)